Internship Income, International Student Tax Treaty Benefits

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Balmoral

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Scenario: An international student (F-1 Visa) completing a doctorate receives income from their predoctoral internship. Is the pay during internship taxable?

-Are there any international students who went through internship that can share if they had to file taxes?
-I read that some countries have treaties with the US and grants and allowances are exempt from taxation.

Any thoughts? Most CPA's and lawyers are just not as familiar with international tax treaties so I thought I would ask here.

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It essentially depends on:
  • how long you've been in the country
  • what types of visa you have been on during that time.
Talk to your international student office. They should know how to handle this. My university has an entire tax department just for international students. Worst case, they should know who to refer you to.
Here is a link that explains everything, but it takes some time to fully grasp it.
 
Most likely, you'll have to pay taxes (see http://www.nolo.com/legal-encyclopedia/visa-green-card-holder-pay-taxes-29639.html) - double check, but I think this matches what I found on the IRS website a few weeks ago but didn't manage to unearth again. My wife immigrated recently so we had to research all this.

Generally speaking, unless your "primary residence" is outside the US it seems pretty tough to escape from doing so.
 
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